Crop-Hail Production Plan (CHPP)
General Summary
The purpose of the Crop-Hail Production Plan (CHPP) endorsement is to cover on a CHPP unit basis the portion of the crop not insured under your Multiple Peril Crop
Insurance (MPCI) policy.
Availability
Production Plan is available in the following states: CO, IA, IL, IN, KS, MN, MO, MT, ND, NE, OH, SD, WI and WY
Crops*
Corn, popcorn, dry beans, soybeans, sunflowers and wheat as specified in the state specific guidelines
*Check availability by crop by state.
CHPP Yield Modifiers
100%, 105%, 110%, 115%, 120%
CHPP Price Election Modifiers
25% to 100%, in 5% increments, of the MPCI price election
Unit Options
Unit options are based on the unit structure of the underlying MPCI policy, with two exceptions:
• By center pivot
• Underlying optional unit for CAT coverage, enterprise or whole-farm units
To qualify for the above exceptions, the insured must harvest units separately and records must be maintained by individual CHPP units.
Determining Coverage (CHPP Limit of Insurance)
Example
Crop: Irrigated Corn
Acres: 100
MPCI Policy:
MPCI Approved Yield Per Acre: 150 bushels
MPCI Coverage Level: 75%
MPCI Price Election: $6.00 per bushel
Insured Interest: 100%
Crop-Hail Production Plan (CHPP) Elections:
CHPP Yield Modifier: 110%
CHPP Price Election: $6.00
CHPP Price Election Modifier: 100%
MPCI Approved Yield
x
CHPP Yield Modifier
x
Acres
=
CHPP Guarantee
150
x
1.10
x
100
=
16,500.00
MPCI Approved Yield
x
MPCI Level
x
Acres
=
MPCI Production Guarantee
150
x
0.75
x
100
=
11,250.00
CHPP Guarantee
-
MPCI Production
Guarantee
x
CHPP Price
Election
x
CHPP Price Election
Modifier
x
Insured Interest
=
CHPP Limit of
Insurance
16,500.00
-
11,250.00
x
$6.00
x
1.00
x
1.00
=
$31,500
This institution is an equal opportunity provider and employer.
Note: This summary is for general illustration only. See policy for program details.
Courtesy of Rain and Hail L.L.C. • 800-776-4045 • www.RainHail.com
Page 1 of 3
MKTG_4015_03_08_12
Crop-Hail Production Plan (CHPP)
General Summary
Calculating a Loss
1.There will never be a payable loss for any CHPP unit if the CHPP production to count from the CHPP unit exceeds the CHPP guarantee for the CHPP unit.
2.The amount payable for the CHPP unit will be determined as follows:
a.Multiply the CHPP guarantee by the weighted average percentage of loss, multiplied by the CHPP price election, multiplied by the CHPP price election modifier,
multiplied by your share in the crop to determine the hail deficiency for the CHPP unit.
b.Calculate the production deficiency for the CHPP unit by subtracting the CHPP production to count from the CHPP guarantee, then multiplying the result by the
CHPP price election, multiplied by the CHPP price election modifier, multiplied by your share in the crop.
c.Determine the lesser of the hail deficiency from 2.a. or the production deficiency from 2.b.
In no event will the loss payable exceed 100% of the CHPP limit of insurance for the CHPP unit.
Example 1
Crop-Hail Percent of Loss = 40% Unit Weighted Average Percentage of Loss
How the Weighted Percent of Loss for a Unit is calculated:
100 acres in the unit, Count 1 = 34%, Count 2 = 55%, Count 3 = 28%, and Count 4 = 43%
The weighted average is the sum of the determined percent of loss of each count in relation to the entire unit.
(34% x 25%)
+
(55% x 25%)
+
(28% x 25%)
+
(43% x 25%)
=
40%
8.50%
+
13.75%
+
7%
+
10.75%
=
40%
CHPP Guarantee
x
Weighted Average
Percentage of loss
x
CHPP Price Election
x
CHPP Price Election
Modifier
x
Share
=
Hail Deficiency
16,500
x
0.40
x
$6.00
x
1.00
x
1.00
=
$39,600
Harvested/Appraised CHPP production to count = 9,240
CHPP Guarantee
-
CHPP Production to
Count
x
CHPP Price Election
x
CHPP Price Election
Modifier
x
Share
=
Production
Deficiency
16,500
-
0.40
x
$6.00
x
1.00
x
1.00
=
$39,600
The Hail deficiency is the lesser of, however the amount payable would be the CHPP Limit of Insurance, $31,500.
Example 2
Crop-Hail Percent of Loss = 20% Unit Weighted Average Percentage of Loss
How the Weighted Percent of Loss for a Unit is calculated:
100 acres in the unit, Count 1 = 23%, Count 2 = 38%, Count 3 = 19%, and Count 4 = 0%
The weighted average is the sum of the determined percent of loss of each count in relation to the entire unit.
(23% x 25%)
+
(38% x 25%)
+
(19% x 25%)
+
(0% x 25%)
=
20%
5.75%
+
9.50%
+
4.75%
+
0%
=
20%
CHPP Guarantee
x
Weighted Average
Percentage of loss
x
CHPP Price Election
x
CHPP Price Election
Modifier
x
Share
=
Hail Deficiency
16,500
x
0.20
x
$6.00
x
1.00
x
1.00
=
$19,800
Harvested/appraised CHPP production to count = 13,500
CHPP Guarantee
-
CHPP Production to
Count
x
CHPP Price Election
x
CHPP Price Election
Modifier
x
Share
=
Production
Deficiency
16,500
-
13,500
x
$6.00
x
1.00
x
1.00
=
$18,000
The amount payable would be the Production Deficiency, $18,000 which is less than the Hail Deficiency and it does not exceed the CHPP limit of insurance for the unit
of $31,500.
This institution is an equal opportunity provider and employer.
Note: This summary is for general illustration only. See policy for program details.
Courtesy of Rain and Hail L.L.C. • 800-776-4045 • www.RainHail.com
Page 2 of 3
MKTG_4015_03_08_12
Crop-Hail Production Plan (CHPP)
General Summary
Underwriting Guidelines
• This endorsement does not provide coverage on an acre basis.
• Crop-Hail Production Plan Limit of Insurance - The difference between the CHPP guarantee and the MPCI production guarantee is multiplied by the CHPP price
election, multiplied by the CHPP price election modifier, multiplied by your share in the crop. If multiple CHPP price elections or CHPP price election modifiers exist
within a single CHPP unit, the CHPP limit of insurance will be calculated separately for the associated acreage and then totaled to determine the CHPP limit of
insurance for the CHPP unit.
• The CHPP limit of insurance for each CHPP unit is based on the units’ ability to produce at least the CHPP guarantee for the insured crop(s) prior to damage by insured
or uninsured perils.
• All acreage of the insured crop(s) grown in the applicable county(ies) insured in which you have an insurable interest must be insured under this endorsement. Acreage
which is prevented from being planted is not insurable.
• The crop acreage insured under this endorsement must also be insured with us under a MPCI policy. Any subsequent transfer to another approved
insurance provider, cancellation, or termination of the underlying MPCI policy for any crop(s) and/or county(ies), during the same year for which coverage is in effect
under this endorsement, will result in automatic cancellation of the coverage provided under this endorsement for the same crop(s) and/or county(ies).
• There will never be a payable loss for any CHPP unit if the CHPP production to count from the CHPP unit exceeds the CHPP guarantee for the CHPP unit.
• The CHPP limit of insurance for each CHPP unit under this endorsement will be determined from the information reported by you for your MPCI policy for the same
acreage. If you do not report all of the required information from your MPCI policy by the published acreage reporting due date(s) for such coverage, we reserve
the right to determine, by CHPP unit, the required information or to deny coverage on such units. If you have misreported any information to us, or if we determine
any information is incorrect or has changed, we reserve the right to adjust the CHPP limit of insurance for each CHPP unit accordingly based on the information we
determine to be correct.
• Green Snap or Wind Coverage Option: In consideration of the additional premium at which this coverage option is written, your coverage is amended to include direct
loss to your corn described in the Schedule of Insurance caused by wind. Application for coverage under this option must be made by June 15 of the current
crop year, unless otherwise agreed to by us.
a.May not be available in all states/counties. See state specific underwriting rules.
b.Additional premium:
Green Snap - 25% of the applicable CHPP rate
Wind Coverage - 50% of the applicable CHPP rate
• Extra harvest expense coverage is NOT available with the CHPP.
• We do not cover the actual cost of replanting or any expense incurred to replant. When any acre of crop is damaged by hail to the extent that replanting is necessary,
as determined by us, and replanting to the same crop is feasible under the growing conditions where such crop is grown, any potential replanting loss under this
endorsement is limited to any percentage of loss due to a delay in replanting, if any, published in the applicable crop loss adjustment procedures or in the Special
Provisions. If the replanted crop is subsequently damaged by hail, the hail loss will be determined by multiplying the percentage of loss by the coverage remaining
after accounting for the percentage of loss due to delay. Any amount payable due to a delay in replanting will be calculated on a CHPP unit basis.
This institution is an equal opportunity provider and employer.
Note: This summary is for general illustration only. See policy for program details.
Courtesy of Rain and Hail L.L.C. • 800-776-4045 • www.RainHail.com
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